Implementation Plan Rev 1 - AZ ISA Docs/August 2000 FERC Filing Docs... · Summary of Implementation Plan Since the ACC adopted the Competition Rules, FERC has issued Order 2000.

Revision 1ORIGINAL ISSUE 8/21/0006/08/00

Arizona Independent Scheduling Administrator Association

(Az ISA)

Proposed Implementation Plan

Revision 1 August 21, 2000

Revision 1ORIGINAL ISSUE 8/21/0006/08/00

PROPOSED Az ISA IMPLEMENTATION PLAN TABLE of CONTENTS

SECTION 1..................................................................................................................................... 1

EXECUTIVE SUMMARY .................................................................................................... 1

SECTION 2..................................................................................................................................... 5

IMPLEMENTATION PLAN OVERVIEW ........................................................................... 5

SECTION 3................................................................................................................................... 10

IMPLEMENTATION PLAN PHASES ............................................................................... 10

SUMMARY of REVISIONS........................................................................................................ 25

Revision 1 7/29/00 ................................................................................................................ 25

APPENDICES .............................................................................................................................. 26

APPENDIX A....................................................................................................................... 27

APPENDIX B....................................................................................................................... 35

APPENDIX C ...................................................................................................................... 36

Revision 1ORIGINAL ISSUE 1 08/21/0006/08/00

SECTION 1

EXECUTIVE SUMMARY Background

The Retail Competition Rules adopted by the Arizona Corporation Commission (Commission or ACC) directed that the Affected Utilities that own or operate transmission facilities form an Arizona Independent Scheduling Administrator (Az ISA). The Rules (R14-2-1609.D) describe five characteristics that the Az ISA would be required to possess. These characteristics or responsibilities are:

• Calculation of Available Transmission Capacity (ATC) for the Arizona transmission

utilities of Affected utilities and other Az ISA participants and develop and operate a statewide OASIS

• Implement and oversee nondiscriminatory application of operating protocols to

ensure transmission access

• Provide dispute resolution processes to resolve claims of discriminatory treatment in the reservation, scheduling, use and curtailment of transmission services

• Utilize a single standardized procedure for all requests (wholesale, Standard Offer

retail, and competitive retail) for reservation and scheduling the use of the Arizona transmission facilities belong to the Affected Utilities and other Az ISA participants

• Implement a transmission planning process to assure that future load requirements

will be met. The Rules (R14-2-1609E) also require that the Affected Utilities file an Az ISA implementation plan that addresses:

• Az ISA governance, incorporation, financing, and staffing

• Acquisition of physical facilities and staff

• Schedule for the phased development of the Az ISA functionality and proposed transition to a regional Independent System Operator (ISO) or Regional Transmission Organization (RTO)

• Contingency plans to ensure that critical functionality is in place no later than 3

months following the adoption of the Competition Rules

• Other significant issues related to the timely and successful implementation of the Az ISA.


Summary of Implementation Plan Since the ACC adopted the Competition Rules, FERC has issued Order 2000. Under FERC Order 2000, all public utilities that own, operate or control interstate transmission facilities and are not members of an approved ISO must file by October 15, 2000 a plan to participate in an RTO that will be operational by December 15, 2001 or explain why it cannot now join an RTO and its timeline for future efforts. Items that have been identified for implementation by the Az ISA include functionalities that may best be deferred until an RTO is operational. By the latter part of 2000 the Az ISA will be able to review plans filed by the utilities for RTO implementation and make an informed decision on the need for the Az ISA to undertake certain functions prior to an RTO providing the function. The transition from the ISA to an RTO will be dependent on the schedule for completing the development of an RTO such as Desert STAR. RTO formation is currently under development in response to the December 20, 1999, FERC final rule on regional transmission organizations. Docket No. RM99-2-000 (FERC 2000). Currently, Desert STAR anticipates filing its FERC tariff in the third quarter of 2000. The Az ISA Implementation Plan is presented in a staged format to allow for Az ISA functions that could be deferred until an RTO is operational. The following summarizes each of the required aspects of the Az ISA Implementation Plan (Plan) in accordance with R14-2-1609. Each element is discussed in detail in Sections 2 and 3 of the Plan. Az ISA governance, incorporation, financing, and staffing The Az ISA was incorporated in September 1998 as a non-profit Arizona corporation. Governance of the Az ISA was established in its by-laws dated October 29,1998. The by-laws established the duties and responsibilities of the Az ISA and also defined membership classes and participation eligibility. The initial financing of the Az ISA has been primarily from loans from transmission owners and certain Affected Utilities including Arizona Public Service Company, Tucson Electric Power, Citizens Utilities, Arizona Electric Power Cooperative, and Salt River Project, and to a minor extent from membership dues. The initial capitalization loans, amounting to approximately $1.2 million, will be repaid with interest over a two-year period after FERC acceptance and implementation of the Az ISA tariff. The phased development of Az ISA is based on twothree implementation phases identified in the PM, as follow:

1. Phase I1 (Initial) - This phase includes Alternative Dispute Resolution (ADR) and Limited Protocol Manual oversight. This oversight function includes OASIS and Allocated Retail Network Transmission (ARNT). The transmission providers (TPs)/Control Area Operators (CAOs) will implement the protocols except where waivers are specifically granted.

1 Phase I as defined in PM


2. Phase II2 (Full Compliance) Phase - In this phase Az ISA functions will include all responsibilities in Competition Rules. In addition to the Initial Phase I function, Az ISA will: a) be responsible for OASIS/ATC calculations, b) utilize standardize procedure for transmission reservation & scheduling and c) implement a statewide transmission planning process.

3. Phase II (Expanded Features) Phase - Although not a part of the Competition Rules,

there are features which can enhance the Az ISA functionality. The functions are ARNT and Energy Imbalance (EI) trading and ARNT auction settlement.

Only the Initial Phase is currently planned to become operational. The Phase II Full Compliance and Expanded Features Phases will be reviewed after the FERC Order 2000 filings to determine if and when these phases should be implemented. Staffing requirements and estimated annual cost for the each phase described about are shown in the following table.

Phase Staffing Annual Cost ($000)1

1. Phase I, Initial 5 7572

2. Phase II, Full Compliance 18 2,258 3. Phase II, Expanded Features 2 2,105

Total 25 5,120 1 Includes 10% Budget Contingency 2 Startup, $490K; Administer PM, $267K

In addition, there is a Capitalization repayment-funding requirement of $693K/year for two years. Acquisition of Physical Facilities and Staff Currently the Az ISA is housed in the offices of Western Area Power Administration (Western). The Western facilities, located on 43rd Avenue in Phoenix, have sufficient space available for the foreseeable future that can be used by the Az ISA. Therefore, it is not anticipated that the Az ISA will need additional space within its anticipated lifespan. As noted above, the Az ISA will require additional staff to fulfill its functions. It is anticipated that staffing will be acquired through advertisements in trade journals and utilizing staffing specialists as required. One of the major difficulties that the Az ISA will face is the ability to attract qualified staff. The utility business, as a whole, is facing difficulty attracting and retaining qualified staff. The Az ISA’s ability to attract staff will be exacerbated because of the fact that, by design, the entity will cease to exist in a relatively short timeframe. Schedule for Phased Development The following table lists the key elements in the Az ISA development:

Proposed Az ISA Implementation Plan Timeline

2 Phase II as defined in PM


1. Affected Utilities submit Protocols Manual to ACC June 15, 2000 2. Affected Utilities submit Implementation Plan to ACC

for review June 15, 2000

3. Az ISA draft FERC filing completed and distributed to Az ISA membership for review

June 30, 2000

4. Az ISA Board considers approval of FERC Filing August 21July 17, 2000 5. Az ISA provides ACC with copy of draft FERC Filing August 28, 2000 6. ACC Open Meeting August 22-23, 2000 7. Az ISA files tariff with FERC By September 23, 2000 8. Az ISA implements FERC approved tariff By November 23, 2000

Other Significant Issues The Az ISA passed a significant milestone with the conditional acceptanceapproval of the Protocol Manual by the Board of Directors on April 7, 2000. Other significant milestones still must be met including the preparation and filing of a FERC tariff. The membership of the Az ISA consists of organizations with a broad spectrum of interests and structures, which makes for significant debate before consensus can be reached. This has resulted in the inability to meet the initial schedules identified by the Commission in the Retail Electric Competition Rules. Among the issues that the Az ISA must address before it can successfully move forward with implementation are:

• Funding - R14-2-1609G states “It is the intent of the Commission that prudently-incurred costs incurred by Affected Utilities in the establishment of the Arizona Independent Scheduling Administrator and subsequently the Independent System Operator, should be recovered from customers using the transmission system, including the Affected Utilities’ wholesale customers, Standard Offer retail customers, and competitive retail customers on a non-discriminatory basis through Federal Energy Regulatory Commission-regulated rates.” The rules also indicate that the Commission may authorize Affected Utilities to recover the Az ISA costs through a distribution surcharge should the FERC not permit recovery of such costs. The Az ISA board of directors is currently addressing the cost recovery issues and has not reached consensus. It should be noted that many of the Az ISA participants are neither Commission nor FERC regulated. Further, some Affected Utilities purchase their power requirements at wholesale from out-of-state suppliers. Although the Commission’s Rules indicate that it expects transmission owners to recover costs associated with the Az ISA through regulated rates or distribution surcharges, locally-controlled utilities such as SRP are not rate-regulated by the Commission or FERC. Cost recovery is a significant issue for Az ISA.

• Staffing – As previously noted, the Az ISA may have difficulty attracting qualified

staff members. It may become necessary to staff the Az ISA through contract employees or by utilizing consultants. This will add to the costs of the Az ISA operations.


SECTION 2

IMPLEMENTATION PLAN OVERVIEW Background The Az ISA was formed in September 1998 as a non-profit Arizona corporation to support the provision of comparable, non-discriminatory retail access to the Arizona transmission system to facilitate a robust and efficient competitive electric market in Arizona. The Az ISA is intended to serve as an interim electric transmission scheduling administrator to facilitate the operation of Arizona’s competitive electric retail market until the implementation of an RTO that supercedes the Az ISA. As of April 25, 2000, the Az ISA had 62 members. A membership list is included in the Plan Appendix. Governance The Az ISA is governed by a Board of Directors chosen from Az ISA member representatives. The current Board of Directors roster is included in the Plan Appendix. There are five member classes: transmission facilities providers; local load servicing entities; aggregators; independent generators and wholesale power marketers; and end-users. The Az ISA Board consists of eleven voting members, including two representatives from each member class, plus the Az ISA Acting Director. All votes of the Board require a two-thirds majority, and no business shall be conducted without two-thirds of the Board present. Alternate Dispute Resolution The Az ISA By-laws also provide for three alternative dispute resolution forums, including a fast-track arbitration that provides a decision within 24 hours, an expedited arbitration that is completed within two weeks, and, by mutual agreement of the disputing parties, mediation. For complicated disputes, the By-laws provide that parties to the dispute may initiate peer review or a mediation process in accordance with the By-laws or the Director of the Az ISA shall cause an arbitration procedure to be initiated unless the parties to the dispute choose to take the dispute directly to FERC or the courts, whichever is appropriate. Funding The Az ISA issued promissory notes to each utility contributing to the Az ISA start-up costs. Total amount for start-up loans is $1,200,000. Repayment of these start-up loans will begin 60 days after the FERC tariff is approved. Repayment period is 24 months. Still to be determined is the tariff structure the Az ISA will use to fund repayment of start-up loans as well as annual operation and maintenance costs. The type(s) and amounts will be included in the draft tariff document scheduled for distribution to the Az ISA membership for review June 30, 2000. Operating Protocols


During the development of the plan for the Az ISA, the stakeholders determined the need for a set of operational and administrative protocols to govern operations of the Az ISA. The protocols have been developed through a participatory process open to all stakeholders. The protocols define the duties to be performed and the procedures to be followed by the Az ISA, control area operators (CAO), and transmission providers (TP) that become members of the Az ISA, and scheduling coordinators (SC). It is intended that the protocols will result in the CAOs and TPs employment of uniform and non-discriminatory standards and procedures for the use of the interconnected transmission system in Arizona for retail electric service. The protocols address the following subjects as they affect transmission for retail electric competition: total transmission capability determination; retail transmission allocation; retail transmission reservations and OASIS; congestion management; emergency operations; must-run generation; ancillary services; energy imbalance for retail transmission; scheduling; and after-the-fact checkout/settlement for retail transmission. On April 7, 2000, the Az ISA Board of Directors conditionally acceptedapproved the operational and administrative protocols that will be used by most entities serving retail load in Arizona. The Az ISA is now preparing the FERC and ACC filings requesting authority to implement the Protocols. A copy of the resolution of the Board of Directors that approved the Protocols Manual is included in the Appendix. Next Steps The Plan accounts for Az ISA functions that may be deferred until an RTO is operational. RTO formation is currently under development in response to the December 20, 1999, FERC final rule on regional transmission organizations. Docket No. RM99-2-000. Under this Order, all public utilities that own, operate or control interstate transmission facilities and are not members of an approved ISO must file by October 15, 2000 a plan to participate in an RTO that will be operational by December 15, 2001, or explain why it cannot now join an RTO and its timeline for future efforts. Items that have been identified for implementation by the Az ISA include functionalities that may best be deferred until an RTO is operational. By the latter part of 2000 the Az ISA will be able to review plans filed by the utilities for RTO implementation and make an informed decision on the need for the AISA to undertake certain functions prior to an RTO providing the function. The following table “Az ISA Action or Document and Equivalent ACC Rule R14-2-1609 Requirement” presents the association between ACC Rule 1609 and the Az ISA documentation that meets the ACC requirements. Note that implementation of many functions (items 1,2,5,6 and 8) will be considered by the Board after the public utilities that own, operate or control interstate transmission facilities and are not members of an approved ISO file with the FERC a plan to participate in an RTO that will be operational by December 15, 2001. Other future implementation dates will require Az ISA Board approval of the FERC tariff filing and a Monitoring Plan that is included in the April 7, 2000 Board resolution.


Az ISA Action or Document and Equivalent ACC Rule R14-2-1609 Requirement

Ite

m

R14-2 1609 Requirement Az ISA Document or Action

Imple Phase

1 D.1 The Az ISA shall calculate Available Transmission Capacity (ATC) for Arizona transmission facilities that belong to the Affected Utilities or other Arizona Independent Scheduling Administrator participants.

Operating Protocols Section IV Transmission Reservation and OASIS Management Principles

Phase II

2 D.1 Az ISA shall develop and operate an overarching statewide OASIS

Operating Protocols Section IV Transmission Reservation and OASIS Management Principles

Phase II

3 D.2 The Az ISA shall implement and oversee the nondiscriminatory application of operating protocols to ensure statewide consistency for transmission access.

• Az ISA Approval of Operating Protocols

• FERC Approval of Az ISA Tariff

? Phase I

4 D.3 The Az ISA shall provide dispute resolution processes that enable market participants to expeditiously resolve claims of discriminatory treatment in the reservation, scheduling, use, and curtailment of transmission services.

Az ISA Bylaws

Phase I

5 D.4 All requests (wholesale, Standard Offer retail and competitive retail) for reservation and scheduling of the use of Arizona transmission facilities that belong to the Affected Utilities or other Az ISA participants shall be made to, or through, Az ISA using a single, standardized procedure.

Operating Protocols Oversight only

Phase II

6 D.5 The Az ISA shall implement a transmission planning process.

Operating Protocols Section III Total Transmission Capability Determination Principles

Phase II

7 E Implementation Plan 1. Articles of Incorporation

2. By-laws 3. Governance 4. Protocols

5. Tariff 6. File Tariff 7. Implement Tariff

1.Phase I

8 I Under auspices of the Az ISA, the Affected Utilities and other stakeholders shall develop statewide protocols for pricing and availability of services from Must-Run Generating Units.

Operating Protocols Section VIII Must-Run Generation Protocol

Phase I


Item

R14-2 1609

Requirement Az ISA Document or Action Imple Phase

9 J The Affected Utilities and other stakeholders, under the auspices of the Az ISA, shall identify statewide services to be settled on and developed fair and reasonable pricing mechanisms to assure a consistent and fair settlement process.

• Az ISA Approval of Operating Protocols

? Phase I

Assumptions:

1.Tariff filing approved by the Board prior to August 2,2000 2.FERC filing by September 23,2000 The Plan is intended to provide the Az ISA Board of Directors, the Arizona Corporation Commission (Commission), and other interested parties with information on Az ISA organizational structures, costs, and implementation timelines that would be required to meet the intended purpose of the organization. An Az ISA work group was formed to develop an Implementation Plan that would meet the requirements of the Az ISA Board of Directors and the ACC. The work group developed a plan that included several stages in the development of Az ISA functions. The benefits of this approach are separation of information on costing and implementation considerations associated with each function. The information can be used to evaluate the current and future needs of the Az ISA. The implementation stages are:

1. Phase I3 (Initial) Phase - This phase includes Alternative Dispute Resolution (ADR) and Limited Protocol Manual oversight. This oversight function includes OASIS and Allocated Retail Network Transmission (ARNT). All TPs/CAOs will implement the Az ISA’s protocols, except those specifically granted waivers.

2. Phase II4 (Full Compliance) Phase - In this phase, Az ISA functions will include all

responsibilities in Competition Rules. In addition to the Initial Phase I function, Az ISA will: a) be responsible for OASIS/ATC calculations, b) utilizing standardized procedures for transmission reservation & scheduling and c) implementing a statewide transmission planning process.

3. Phase II (Expanded Features) Phase - Although not a part of the Competition Rules,

there are features which can enhance the Az ISA functionality. Namely ARNT and Energy Imbalance (EI) trading and ARNT auction settlement.

Each phase of implementation is covered individually in Section 3. Section 3 includes references to the part of By-laws, Protocols or ACC rule that require the function, and the plan for implementing the function. The format for the detailed plan is the following: 3 Phase I PM implementation 4 Phase II PM implementation


• Identification of the phase and task • Identification of the activities to be undertaken • Identification of the controlling rule or requirement for the activity (i.e. the Protocol

Manual, the By-Laws of the Az ISA, and/or Arizona Corporation Commission Rule applicable to Affected Utilities)

• Activities included in the phase • Activities not included in the phase • Implementation Requirements ( Equipment and Resources, Staffing , Capital,

Operations and Maintenance Expenses, Timeframe for Completion, Timeframe for Implementation, Contingency Plan

• Plan Detail and Costs Proposed Az ISA Implementation Plan Timeline

1. Utilities submit Protocols Manual to ACC June 15, 2000 2. Utilities submit Implementation Plan to ACC for review June 15, 2000 3. Az ISA draft FERC filing completed and distributed to Az

ISA membership for review June 30, 2000

4. Az ISA Board considers approval of FERC Filing August 21July 17, 2000 5. Az ISA provides ACC with copy of FERC Filing August 28, 2000 6. ACC Open Meeting August 22-23, 2000 7. Az ISA files tariff with FERC By September 23, 2000 8. Az ISA implements FERC approved tariff By November 23, 2000


SECTION 3 IMPLEMENTATION PLAN PHASES

Phase I1 (Initial), Task 1 ADR Process Implementation Directives

Protocols Manual Protocols Manual Section I “Introduction”, Paragraph 6.”Disputes”: “ Disputes arising from the application or implementation of these Protocols shall be resolved pursuant to the dispute resolution procedures contained in Section 6 of the Az ISA By-Laws.” Az ISA By-laws “5.3.9. Implement the dispute resolution procedures provided in Section 6 as appropriate;” “5.3.10. Provide oversight and take action, as required, to ensure compliance with the Protocols Manual and FERC-recognized Standards of Conduct related to transmission access and operation of the Interconnected Transmission System; investigate and take action on complaints related to the application of the Protocols Manual and such Standards of Conduct and to resolve other issues related to discriminatory treatment in the provision of transmission service;” “5.3.11. Make immediate decisions, based on the Protocols Manual, with respect to irregularities discovered during the performance of his/her duties described in Section 5.3.10 and with respect to disputes between transmission providers and transmission users” “6. Az ISA Dispute Resolution Process that includes: Section 6.1, “Fast-Track ADR”, Section 6.2., “Alternative Dispute Resolution Procedures”, and Section 6.3. “Disputes Involving Government Agencies”.” ACC Rule R14-2-1609 R14-2-1609D-3. “The Arizona Independent Scheduling Administrator shall provide dispute resolution processes that enable market participants to expeditiously resolve claims of discriminatory treatment in the reservation, scheduling, use, and curtailment of transmission services.”

Activities included in Phase I1 (Initial),, ADR Process Task 1 Executive Director to provide ADR Limited Protocol Manual oversight Activities not included in Phase I1 (Initial),, ADR Process Task 1 Protocol Manual Oversight Data collection from Transmission Providers


Phase I1 (Initial),, ADR Process Task1 Implementation Plan

ADR and Limited PM Oversight

I. Equipment and Resources Executive Director to provide ADR

II. Staffing 1. Executive Director 2. Full time administrative support

III. Capital None

IV. O and M Expenses Staffing and Other Expenses $490K

V. Timeframe By November 23,2000

VI. Implementation N/A – Staff available VII. Contingency Plan None

Phase I1 (Initial),, ADR Process Task1 Detail and Costs

ADR and Limited PM Oversight

Item Function Capital $1000

O and M $1000/yr Staffing Requirements

1 ADR 100 1 2 PM Oversight 100 1

3 Administrative and Infrastructure

218

4 Legal 72 Total - $490 2

Az ISA Costs

Item Cost Item $/yr

1 O and M $490,000

2 Capital for 2yr -

Total $490,000


Phase I1 (Initial),, Task 2 - Administer Interim Protocols Manual

Interim Protocols Manual. The Interim Protocols Manual (PM) is the set of Protocols as amended and conditionally accepted by the Az ISA board on April 7, 2000. The Az ISA Board approved implementation of the Protocols on an interim basis until a FERC approved Regional Transmission Organization is established. The Board further approved implementation of the Protocols on an interim basis subject to certain conditions being met. Furthermore, implementation of many of the Az ISA organizational responsibilities specified in the PM would be contingent on meeting defined retail transaction levels. Implementation Directives

Protocols Manual Protocols Manual Section I “Introduction”, Paragraph 3 –“ During the development of the plan for the Az ISA, the stakeholders determined the need for a set of operational and administrative protocols -- the "Protocols Manual" -- to govern operations of the Az ISA.” Protocols Manual Section I “Introduction”, Paragraph 3 – “The Protocols Manual, as set forth herein, defines the duties to be performed and the procedures to be followed by the Az ISA, CAOs and TPs that become members of the Az ISA, and SCs.” Az ISA By-laws “5.3.3 Develop with interested representatives of the Member Classes the Protocols Manual for the approval of the Board” “5.3.10. Provide oversight and take action, as required, to ensure compliance with the Protocols Manual and FERC-recognized Standards of Conduct related to transmission access and operation of the Interconnected Transmission System; investigate and take action on complaints related to the application of the Protocols Manual and such Standards of Conduct and to resolve other issues related to discriminatory treatment in the provision of transmission service;” ACC Rule R14-2-1609 R14-2-1609D-2. “The Arizona Independent Scheduling Administrator shall implement and oversee the nondiscriminatory application of operating protocols to ensure statewide consistency for transmission access. These operating protocols shall include, but are not limited to, protocols for determining transmission system transfer capabilities, committed uses of the transmission system, available transfer capabilities, Must-Run Generating Units, energy scheduling, and energy imbalances.”


Activities included in Phase I1 (Initial),, Administer Interim Protocols Manual Task 2: ADR Administer Protocols Manual Limited monitoring of TPs OASIS and ARNT scheduling functions Activities not included in Phase I1 (Initial),, Task2 Administer PM State wide OASIS State wide scheduling State wide planning ARNT auction and trading Energy Imbalance trading and settlement

Phase I1 (Initial),, Task 2 Administer PM - Implementation Requirements

I. Equipment and Resources Personal computers, and office supplies

II. Staffing 1. 2 Data technicians 2. Engineer

III. Capital 1. 3 PC workstations 2. Office furniture

Total $15K

IV. O and M Expenses 1. Staffing 2. Other Expenses Total $259

V. Timeframe By November 23,2000

VI. Implementation Staff in place by October 23, 2000

VII. Contingency Plan No staff in place by October 23, 2000 1. TPs to provide data to Az ISA as needed for ADR

and oversight 2. Director available to perform ADR and limited

oversight 3. Continue to recruit: (i) engineer, (ii) analysis (part

time office manager onboard)


Phase I1 (Initial),, Task 2 Administer PM - Plan Detail and Costs

April 7 PM w/o Planning/Scheduling or ARNT/EI Additions



1 ATC/OASIS 56 1

2 Administer PM 15 112 2

3 Administrative and Infrastructure 19

4 Legal 72 Total Task 2 15 $259 3.0

Az ISA Costs

Cost Item $/yr

O and M 259,000

Capital for 2yr 8,223

Total $267,223


Phase II2 (Full Compliance), Task 1 - OASIS and ATC Calculation

Implementation Directives

Protocols Manual Protocols Manual Section 4 “Transmission Reservations and OASIS Management Principles” addresses the approach the Az ISA will utilize to implement a statewide OASIS. Prior to the Az ISA’s implementation of a statewide OASIS, OASIS management for RNITS will continue to be performed by the TPs, with Az ISA oversight. After the Az ISA has implemented the statewide OASIS, the Az ISA will administer this single statewide OASIS for reservations for both RNITS and wholesale transmission service provided pursuant to the TP’s OATT until such time as a RTO takes over such function. Protocols Manual Section 4 “Transmission Reservations and OASIS Management Principles” addresses the process the Az ISA will utilize to monitor and calculate ATC. Paragraph 4.3: Az ISA will monitor release of ATC on each TP’s OASIS. Paragraph 4.4: Az ISA will begin to develop systems to allow it to calculate and update ATC. Az ISA By-laws “5.3.4 Calculate ATC.

5.3.5 Monitor the OASIS with the ultimate objective of developing and operating one state-wide OASIS on which (i) all ATC is posted, (ii) all transmission reservation requests are received, and (iii) ancillary services and secondary transmission are posted.

5.3.7. Update ATC after receipt of accepted transmission reservations and confirmed energy schedules.

5.3.8 Monitor releases of ATC to ensure compliance with the Protocols Manual.” ACC Rule R14-2-1609 R14-2-1609D-1: “The Arizona Independent Scheduling Administrator shall calculate Available Transmission Capacity (ATC) for Arizona transmission facilities that belong to the Affected Utilities or other Arizona Independent Scheduling Administrator participants and shall develop and operate an overarching statewide OASIS.”

Activities included in Phase II2 (Full Compliance), Task 1 OASIS and ATC Calculation Az ISA developed OASIS and Website Staff to operate and maintain OASIS Staff to monitor ATC Activities not included in Phase II2 (Full Compliance), Task 1 OASIS and ATC Calculation N/A


Phase II2 (Full Compliance), Task 1 - OASIS and ATC Calculation Implementation Requirements I. Equipment and Resources 1. 2 PC workstations

2. Office furniture 3. High speed data communication link 4. Adapt existing OASIS site

II. Staffing 2 engineers

III. Capital 1. 2 PC workstations 2. Office furniture Total $15K

IV. O and M Expenses 1 Staffing $200K 2. OASIS site $10K Total $210

V. Timeframe Post October 15, 2000 VI. Implementation 1. Az ISA Technical workgroup will determine technical

requirements of Az ISA OASIS site 2. Az ISA Technical workgroup to determine data, software and

hardware needed for Az ISA to compute ATC, CU and TTC 3. Post October 15, 2000 specifics will determine timetable for

staffing, equipment and facilities requirements. 4. Recruit staff

VII. Contingency Plan TPs to provide data to Az ISA as needed


Phase II2 (Full Compliance), Task 1 Detail and Costs

OASIS and ATC Calculation



1 ATC/OASIS 15 210 2 2 Administer PM Total 15 210 2

Az ISA Costs

Cost Item $/yr

O and M 210,000


Total $218,223


Phase II2 (Full Compliance), Task 2 - State Wide Standardized Scheduling Procedure (including Wholesale)


Protocols Manual Protocols Manual Section VI “Scheduling Protocol” defines the processes and requirements for scheduling energy over specific transmission path(s) for Retail Network Load. Az ISA By-laws “5.3.6. Receive transmission reservation requests and energy schedules concurrently with receipt by Member control area operators and transmission owners” ACC Rule R14-2-1609 R14-2-1606D-4. “All requests (wholesale, Standard Offer retail, and competitive retail) for reservation and scheduling of the use of Arizona transmission facilities that belong to the Affected Utilities or other Arizona Independent Scheduling Administrator participants shall be made to, or through, the Arizona Independent Scheduling Administrator using a single, standardized procedure.”

Phase II2 (Full Compliance), Task 2 - State Wide Standardized Scheduling Procedure (including Wholesale) Implementation Plan I. Equipment and Resources 1. 2 Scheduling consoles

2. 4 PC workstations

II. Staffing 1. 2 – 7x24 Scheduling Desks 10 – Schedulers 2. 3 Preschedulers 3. Supervisor

III. Capital 1. Scheduling Software $500k 2. Network Software, Interface to TPs, Voice recorder,

Computer hardware and PCs -- $200k IV. O and M Expenses 1. Payroll $1,400k

2. Technical support services $45k

V. Timeframe Post October 15, 2000

VI. Implementation Hire personnel, procure hardware and software by September 1, 2000

VII. Contingency Plan Using staff identified under “Monitoring PM”: TPs to copy schedules to Az ISA as requested


Phase II2 (Full Compliance), Task 2 - Plan Detail and Costs

State Wide Standardized Scheduling Procedure (including Wholesale)State wide Scheduling



1 State wide scheduling 700 1,445 14

Total 700 1,445 14

Az ISA Costs

Cost Item $/yr

O and M 1,445,000


Total $1,828,752


Phase II2 (Full Compliance), Task 3 - State Wide Transmission Planning Implementation Directives

Protocols Manual Protocols Manual Section III “Total Transmission Capability (TTC) Determination Principles” identifies transmission planning/operations areas that the Az ISA will participate subject to the Az ISA Board’s direction.

“2. Subject to the Board’s Direction, the Az ISA Executive Director shall:

2.1 Participate in the determination of TTC and Committed uses within the Interconnected Transmission System and revisions thereto.

2.2 Cause the Az ISA to become an affiliate member of the WSCC.

2.3 Participate in SWRTA-sponsored regional coordinated transmission planning efforts.

2.4 Attend, as needed, WSCC Operational Transfer Capability Study Group (OTCSG) meetings for discussion of seasonal ratings on qualified paths within the AZ-NM sub-region of the WSCC.

2.5 As Operating Committee chair, preside over efforts to achieve consistent application of Committed Use determinations within the Interconnected Transmission System.

2.6 Participate in Arizona joint-utility operating and planning study efforts for TTC.

2.7 Participate in the coordination of transmission maintenance schedules among TPs.”

Az ISA By-laws “5.3.2 Participate in (i) operating studies used to determine TTC, (ii) coordination of transmission maintenance schedules, (iii) Member control area operators’ and transmission owners’ determination of TTC, and (iv) determination of committed uses on the Interconnected Transmission System” ACC Rule R14-2-1609 R14-2-1609D-5 “The Arizona Independent Scheduling Administrator shall implement a transmission planning process that includes all Arizona Independent Scheduling Administrator participants and aids in identifying the timing and key characteristics of required reinforcements to Arizona transmission facilities to assure that the future load requirements of all participants will be met”


Phase II2 (Full Compliance), Task 3 - State Wide Transmission Planning Implementation Plan I. Equipment and Resources 2 High-end PC workstations

II. Staffing 2 – Planning engineers

3. Capital Workstations and office equipment Total 20K

4. O and M Expenses Payroll $200K 5. Timeframe Post October 15, 2000 6. Implementation Plan Hire experienced personnel, procure hardware and software.

7. Contingency Plan Participate in SWRTA, WSCC and Arizona operating and planning studies. Continue to recruit for planning engineers.


Phase II2 (Full Compliance), Task 3 – State Wide Transmission Planning Plan Detail and Costs

State Wide Transmission Planning



1 State wide planning 20 200

Total 20 200 2

Az ISA Costs

Cost Item $/yr

O and M 200,000


Total $210,964


Phase II3 (Expanded Features), Task 1 - Additional PM Requirements -- Allocated Retail Network Transmission Protocol (ARNT) and Energy Imbalance (EI) Trading, Auction and Settlements


Protocols Manual Protocols Manual Section V “Allocated Retail Network Transmission Protocol” identifies ARNT auction and trading mechanisms. Protocols Manual Section IX “Energy Imbalance Protocol” identifies EI trading and settlement mechanisms

Phase II3 (Expanded Features), Task 1 - Implementation Plan Allocated Retail Network Transmission Protocol (ARNT) and Energy Imbalance (EI) Trading, Auction and Settlements I. Equipment and Resources 2 PC workstations

II. Staffing 2 – Accounting Technicians

III. Capital Workstations and office equipment Trading and settlement software Total 1,020K

IV. O and M Expenses Payroll 100K V. Timeframe Board approval of business plan prior to June 30,2001 and

competitive retail load levels reach 500 MW VI. Implementation Plan Hire experienced personnel, procure hardware and software.

VII. Contingency Plan None


Phase II3 (Expanded Features), Task 1 - Plan Details and Costs Allocated Retail Network Transmission Protocol (ARNT) and Energy Imbalance (EI) Trading, Auction and Settlements

Allocated Retail Network Transmission Protocol (ARNT) and Energy Imbalance (EI) Trading, Auction and Settlements Additional Requirements -- ARNT and EI



1 ARNT and EI 10 2,100 2 Total 10 2,100 2

Az ISA Costs

Cost Item $/yr

O and M 2,100,000


Total $2,105,482


SUMMARY of REVISIONS

Revision 1 8/21/00 1 Updated Phase I (Initial) ADR Process and Administer PM cost tables to track 2001 budget

estimates in Detailed Implementation Plan: a. Full time Office Manager b. Legal Costs c. Add 10% for budget contingencies

2 Revised summary costs in Executive Summary to reflect #1 3 Revised Plan’s phase implementation naming convention to correspond with PM. 4 Added Summary of Revisions section


APPENDICES

• Appendix A - Az ISA Membership List • Appendix B - Board of Directors • Appendix C - April 7, 2000 Resolution

Arizona Independent Scheduling Administrator Association (Az ISA) Membership List


APPENDIX A

Transmission Facilities Providers Class Chair – Mike Raezer, TEP

Member Representative Alternate

Arizona Electric Power Cooperative (AEPCO)

Larry D. Huff

Patricia Cooper

Arizona Public Service Company (APS)

Cary Deise

Robert Smith

Electrical District #3 of Pinal County

Grant R. Ward

Dennis L. Delaney

Graham County Electric Cooperative

Nelson Peck

Larry D. Huff

Tucson Electric Power Company (TEP)

Michael Raezer

Ed Beck



Local Load Serving Entities Class Chair – Resal Craven, Citizens Utilities

Member Representative Alternate Aguila Irrigation District

Henry A. Brubaker

Dennis L. Delaney

Ak-Chin Indian Community

Leonard S. Gold

Dennis L. Delaney

Buckeye Water Conservation & Drainage District

Jackie Meck

Dennis L. Delaney

Chandler Heights Citrus Irrigation District

Dan Kleinman

Dennis L. Delaney

Citizens Utilities Company

Resal A. Craven

Tyge Legier

City of Mesa

John Branch

Jerry Brouwer

City of Safford/Gila Resources

Kenneth Mecham

Dennis L. Delaney

City of Williams

Dennis Dalbeck

Michael Margrave

Duncan Valley Electric Cooperative

Jack Shilling

Patricia Cooper

Electrical District #7 of Maricopa County

R. D. Justice

Dennis L. Delaney

Electrical District #8 of Maricopa County

James Downing

Dennis L. Delaney



Member Representative Alternate Electrical District #1 of Pinal County

Grant R. Ward

Dennis L. Delaney


Thomas S. Martin

Andrew McBride


Ron McEachern

Dennis L. Delaney


William D. Woehlecke

Dennis L. Delaney


Henry C. Douglas

Dennis L. Delaney

Harquahala Valley Power District

Jeffrey J. Woner

Dennis L. Delaney

HoHoKam Irrigation & Drainage District

Jack Long

Thomas S. Martin

Maricopa Water District

James R. Sweeney

Dennis L. Delaney

McMullen Valley Water Conservation & Drainage District

James D. Downing

Dennis L. Delaney

Navajo Tribal Utility Authority

Randall N. Medicine Bear

Walter F. Wolf, Jr.

Ocotillo Water Conservation District

Jackson Bogle

Dennis L. Delaney

Page Electric Utility

William Kent Romney

Rolland McHaney



Member Representative Alternate Roosevelt Irrigation District

Stanley H. Ashby

Dennis L. Delaney

Salt River Project

Robert E. Kondziolka

Jessica J. Youle

San Tan Irrigation District

Ardith Viste

Dennis L. Delaney

Sulphur Springs Valley Electric Coop.

Creden W. Huber/ Anselmo Torres

Patricia Cooper

Tonopah Irrigation District

Elizabeth Story

Dennis L. Delaney

Town of Thatcher

Terry Hinton

Dennis L. Delaney

Town of Wickenburg

Tom Candelaria

Dennis L. Delaney

Trico Electric Cooperative

Charles N. Emerson

Ron Brown

Wellton-Mohawk Irrigation & Drainage District

Cory Prochaska

C. L. Gould



Aggregators Class Chair – Patricia (Trish) Gambino


Arizona Public Service Energy Services Bob Anderson Barbara Klemstine

Avra Valley Irrigation & Drainage District

John Kai, Jr.

Michael A. Curtis

Cortaro-Marana Irrigation District

Robert Condit

Michael A. Curtis

Eastern Competitive Solutions

Leroy Michael

Michael A. Curtis

Enron Energy Services

Tom Delaney

Marcie A. Milner

Mohave Electric Cooperative, Inc.

Leroy Michael

Navopache Electric Cooperative, Inc.

Leroy Michael

New Energy Ventures Southwest

Phil Harper

Tracey Fitchitt



Independent Generators & Wholesale Power Marketers Class Chair – Vann E. Prater, Dynegy


Arizona Power Authority Donald J. Esgar James P. Bartlett

California Power Exchange, Corp. Martin B. Ochotorena Kenneth A. Fiscella

Calpine

Ralph Hollenbacher

Richard Zahner

Constellation Power Source, Inc.

Bruce McAllister

Jason Cox

Dynegy, Inc.

Vann E. Prater

Barry N. P. Huddleston

Enron Energy Services

Tom Delaney

Marcie A. Milner

Griffith Energy

Dana L. Diller

Jay I. Moyes

Pinnacle West Energy Corporation

David Rumolo

Justin Thompson

Reliant Energy Wholesale Group

John Orr

John Simpson

Southern Company Energy Marketing

Richard Menar

Bobby Campo



End Users Class Chair – Andrew Gregorich, BHP Copper

Member Representative Alternate Agri-Business Council of AZ

David C. Iwanski

Joseph F. Abate

Arizonans for Electric Choice & Competition

Kevin Higgins

Central Arizona Water Conservation District

John D. Newman

Tom Delgado

Honeywell

David M. Mills

Kevin Higgins

Irrigation & Electrical Districts Association

Robert S. Lynch

R. Gale Pearce

ON Semiconductor

Dave Madden

Phelps Dodge Corporation

Tim Summers

Choi Lee

Residential Utility Consumers Office

Lindy Funkhouser

Brian Townsend



Ex officio Class

Member Representative Alternate Arizona Corporation Commission

Ray T. Williamson

Asher D. Emerson


APPENDIX B

Arizona Independent Scheduling Administrator Association (Az ISA)

Board of Directors April 2000

Transmission Facilities Providers Class Larry Huff, Arizona Electric Power Cooperative (2 years)

Cary Deise, Arizona Public Service Company (1 year) Local Load Serving Entities Class Dennis Delaney, K. R. Saline & Associates (consultant) (2 years) Rob Kondziolka, Salt River Project (1 year) Aggregators Class (Vacant) (1 year) Leroy Michael, consultant (2 years) Independent Generators and Wholesale Power Marketers Class Vann E. Prater, Dynegy (1 year) Vacant (2 years) End-Use Customers Class Kevin Higgins, Energy Strategies, Inc. (consultant) (2 years) Lindy Funkhouser, Residential Utility Consumers Office (1 year) Acting Executive Director Patrick J Sanderson, Arizona ISA


APPENDIX C

APRIL 7, 2000 AISA Resolution AS AMENDED AND APPROVED BY THE AISA BOARD ON APRIL 7, 2000.

The AISA Board recognizes that the functions preformed by the AISA are on an interim basis until a FERC approved Regional Transmission Organization is established. Therefore, the Board conditionally accepts the AISA Protocols as presented April 7, 2000. The Board further approves implementation of the Protocols on an interim basis subject to the following conditions: 1) The FERC regulated transmission owners (APS and TEP) will file the Protocols with FERC with

notice of this Board’s conditional approval in substitution for the draft AISA protocols which they had previously filed;

2) AISA will recognize SRP’s substitution of the applicable portion of its Board approved protocols for

the ARNT (except as set forth in (4) below), Must Run and Energy Imbalance Protocols. For those protocols other than ARNT, Must Run and Energy Imbalance SRP will recommend to the SRP Board to adopt the AISA protocols as soon as practicable and will fully implement the AISA Protocols when 50% of the direct retail access load in Section 4.3.4.1 (5) of AISA Protocol No. V is achieved For the ARNT, Must Run and Energy Imbalance Protocols SRP will recommend to the SRP Board to adopt the AISA Protocols when both of the following occur: a) direct access load in the SRP distribution territory reaches 200 MW and b) statewide retail access reaches 500 MW.

3) By means of an appropriate instrument submitted with their regulatory authority and the AISA, the

AISA transmission owners (APS, TEP, AEPCO and SRP) agree that solely for the limited purpose of furthering the interim AISA functions, each shall instruct its Scheduling Coordinator (for standard offer service) to exchange part of its standard offer ARNT as set forth in Paragraph 4 below, (approximately 500 MW for the State) to competitive Scheduling Coordinators serving load within the transmission owner’s service area until such time as the AISA implements an ARNT auction and trading mechanism. Any AISA ARNT auction and trading or Energy Imbalance trading will not be implemented by the Board until competitive direct access load in Arizona exceeds 500 MW and the condition in Paragraph 7 below is met. Therefore, with regard to Protocol V and Protocol IX, implementation approval is granted at this time only for Section 4 of Protocol No. V (ARNT) as revised below, Section 3.6.1 of Protocol No. IX (Energy Imbalance), and such other sections of Protocol Nos. V and IX as may be necessary to implement these sections, respectively;

4) The following changes shall be and hereby are made to the ARNT protocol:

a) Section 4.3.4.1 is deleted in its entirety and replaced with the following: “4.3.4.1 As an addendum to the procedure specified in Section 4.3.3, until any ARNT auction is approved and implemented, each TP’s Standard Offer SC shall exchange up to an amount of MW (set forth by the individual TP below) of ARNT from the Standard Offer SC to Competitive SCs for service to retail load within the transmission owner’s service territory, at the request of the Competitive SCs, in return for a Competitive SC’s exchange to Standard Offer SC of an equal amount of ARNT on other ARNT paths to the same Load Zone. (1) For Arizona Public Service Company (APS): The amount shall equal 200 MW from Palo

Verde to the APS Load Zones.

(2) For Tucson Electric Power Company (TEP): The amount shall equal 80 MW from Four Corners to the TEP Load Zone.

(3) For Arizona Electric Power Cooperative, Inc. (AEPCO): The amount shall equal 4 MW

from Westwing to Vail to service Retail Network Load in the Southeastern Arizona Load


Zone and 5 MW at Westwing for deliveries to the Western Area Power Administration to service Retail Network Load in the Mohave Electric Cooperative Load Zone.

(4) For Citizens Utilities Company (Citizens Utilities): This Section 4.3.4.1 shall not apply to

Citizens Utilities because there is only one ARNT path to each relevant Citizens Utilities’ Retail Network Load Zone.

(5) For Salt River Project Agricultural Improvement and Power District (SRP): The amount

shall equal 200 MW from Palo Verde to the SRP Load Zone.” b) In Section 4.3.4.2, the commitment dates of “September 1, 2000” and “December 31, 2000” shall

be changed respectively to “September 1, 2001” and “December 31, 2001”;

5) The Protocols shall not be used to establish a precedent for transmission service to wholesale customers or for transmission service to be developed under Desert STAR and FERC regulated transmission owners shall include such statement and their agreement to it in any filing made with FERC seeking approval of implementation of the Protocols conditionally approved herein;

6) An AISA Monitoring Plan shall be developed and presented to the Board for approval prior to

September 1, 2000; 7) The AISA shall develop a Business Plan for consideration and approval by this Board prior to June

30, 2001, covering all aspects of AISA activities after that date including any ARNT auction or energy imbalance trading mechanism;

8) For energy imbalance penalties the dead band will be + or – 10%; outside the dead band the penalty

will be 10% of the cost. The matrix in the protocols will be deleted. 9) The FERC Filing Package to be presented to this Board for its consideration and approval prior to

filing shall be consistent with this resolution. The AISA staff shall simultaneously present to the Board a detailed plan indicating how the AISA will perform the obligations it represents it will perform upon approval of its filing;

10) Change Section 4.8 of the March 2000 draft Protocols Part VIII, Must Run to read: Recovery of Must-

Run Generation Fixed Costs occurs as part of the retail end-use customers' service charge regulated by the ACC. Must-Run Generation Fixed Costs are the Fixed Costs associated with specific Must-Run Generation units. Must-Run Generation Fixed Costs will be limited to the percentage of each Must-Run Generation unit's annual usage that is attributable to providing Must-Run Generation service.

Implementation Plan Rev 1 - AZ ISA Docs/August 2000 FERC Filing Docs... · Summary of Implementation Plan Since the ACC adopted the Competition Rules, FERC has issued Order 2000.

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